Citibank Sued After $20 Million Vanishes in NFT Romance Scam

Michael Zidell has filed a lawsuit against Citibank for overlooking signs of a scam that led to a $20 million loss.

The case, filed in federal court in Manhattan on June 24, revolves around a romance scam initiated on Facebook. Zidell was contacted in January 2023 by an individual claiming to be ‘Carolyn Parker’, an entrepreneur. Their online interactions turned personal over time.

After a few weeks, Parker persuaded Zidell to invest in non-fungible tokens (NFTs) through a specific platform, providing detailed instructions. Zidell complied, transferring funds to various bank accounts associated with the platform, totaling over $20 million.

By April, the investment platform vanished, along with all the funds Zidell had sent. Approximately $4 million of the sum was channeled to accounts held at Citibank under the name ‘Guju Inc.’

Zidell alleged that Citibank allowed twelve transfers to proceed without proper scrutiny, despite the unusual size and pattern of the transactions. The lawsuit contended that Citibank failed to monitor the account effectively, neglected standard security measures, and permitted suspicious transactions without due diligence.

On June 25, AUSTRAC reported an 18-month Bitcoin fraud where a 77-year-old widow lost AU$ 433,000. Learn more about the full story.